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Future Shock: Second Thoughts on Hosmer

If you are a prospect hound, the last week has made some sort of live baseball package a must. On Thursday, the Royals called up Eric Hosmer, arguably the best hitting prospect at the upper levels. On Saturday, the Braves called up Julio Teheran, arguably the best pitching prospect at the upper levels. On Sunday, the Red Sox promoted Jose Iglesias, the best defensive shortstop in the minors.

The Teheran and Iglesias promotions require little analysis. Teheran's start against the Phillies on Saturday was the product of a doubleheader and the fact that his turn was up in the Triple-A rotation. Iglesias is just a temporary fill-in for the injured Marco Scutaro, and is present to provide late-inning defense and speed off the bench. Hosmer is a different story. He's not only in Kansas City far earlier than expected, but he's presumably here to stay. But was the timing of the move a sound decision by the Royals or something they will regret down the road?

Let's gets the easy part out of the way: There's little argument that Hosmer is ready to perform at the major-league level. After all, his batting line of .439/.535/.583 in 26 games for Triple-A Omaha looks like something out of the college game before they deadened the bats. This isn't about talent; it's about the mirage of a hot start, winning environments and, of course, money.

I'll admit that I got caught up in the excitement myself. Within 24 hours of Hosmer's arrival at Kauffman Stadium, I did two radio shows in Kansas City, and both times I praised the move and talked about the beginning of a new era in Royals baseball. But wisdom may have come with time, and now I'm thinking that's all a bunch of hogwash.

Last week, I discussed the how the Indians’ hot start had affected their philosophies about bringing up young players this year. The Baseball Prospectus Playoff Odds backed up their excitement, with Cleveland’s surprising April bolstering their chances of reaching the postseason more than ten-fold to greater than 30 percent. That's not the case with the Royals. While having a record above .500 might be an even bigger surprise than what Cleveland is doing, it hasn't moved the needle on the playoff odds, which pegged their chances of post-season baseball at 0.9 percent heading into Wednesday's games. For you folks that just blew your paycheck at Saturday's Kentucky Derby, that's a 111-to-1 longshot that one prospect, even one as good as Eric Hosmer, just can't change to something more realistic.

So why now? Why not wait until other big names at Triple-A, like third baseman Mike Moustakas, and left-handed starters Danny Duffy and Mike Montgomery, were deemed ready? Clearly the struggles of Kila Ka'aihue played a role, but one front-office veteran questions the thought of throwing Hosmer to the wolves alone. “If I'm in the Royals front office, I'm fighting like hell to keep him down,” said the National League executive. “Why bring him up on a team whose big three are Kyle Davies, Bruce Chen, and Jeff Francis? If they wanted to bring up Montgomery, Duffy, and all of those guys and let them take their collective lumps, then OK, I get it. Buy why just him when they have all these washed-up guys and limited playoff chances?”

Maybe the Royals don't believe the playoff odds, and that's fine. They see a surprising start, an American League Central division turned upside down, and a rare window of opportunity. Still, this is gravy to part of the master plan for long-term contention, and calling up Hosmer could impact the Royals’ financial flexibility down the road. The promotion does not change Hosmer's potential free agency when it crosses the six-year service time barrier, but assuming no radical changes in the upcoming CBA, it does likely make him a Super Two following the 2013 campaign. That's one less year of a cost-controlled star, and that year could be expensive.

Let’s assume for a moment that everything works out for the Royals, and the best system in baseball transforms them into a legitimately competitive team, unlike the early 2011 smoke-and-mirrors act. Let’s also assume that Hosmer is a big part of that success, quickly establishing himself as one of the best young hitters in the game. Now going into the 2014 season, the Royals are favorites to win the Central, and instead of having Hosmer under control, he's now subject to arbitration, and thus due a big pay day. The Royals don't have unlimited finances, and that multi-million deal that could have been avoided by waiting one more month three years ago suddenly limits the team in adding the pieces that might put them over the top. You still sure this was the right time for the Royals to unwrap their shiny new toy? Even if Hosmer is immediately great, say, a six-win player, that one month of impatience cost the team millions of dollars three years later for a single extra victory in a season where the odds say overwhelmingly that it just won't matter.

The only argument against this is the concept of the Royals following the lead of the early 1990s Indians teams that produced young players and then locked them up to long-term deals that bought out their arbitration and some free-agent years. On Saturday, I was discussing this via text messages with a veteran scout. After mentioning the thought of locking Hosmer up, I walked away from my phone, only to return to a series of messages, presented here with time stamps to preserve the humor.

The Royals created plenty of excitement with Hosmer's ascension to the big leagues, and I'm the first to admit that I got caught up in it. Just a few days later, I'm wondering if the team will eventually have the same second thoughts that I'm bothered by.

I tend to agree, but a commenter over at Rany On The Royals made an interesting point. Because of the excitement over Hosmer and the admittedly smoke-and-mirrors early success of the major league team, the Royals may earn enough in improved attendance this year, after a couple of years of interest, to significantly offset the cost of Hosmer's Super Two status. Not to pay his whole salary, of course, but we are only talking about a few million dollars here, which isn't enormous in an MLB-salary context.
I also wonder if having Hosmer up now, learning to hit major league pitching, improves the Royals playoff chances in 2012. If so, it could still be worth the money. He clearly has little to learn in the minors.

I agree with this. How many tickets to the Royals have to sell to offset the additional cost? I believe I read that there were over 30,000 in the stands for just his debut alone. With the early season winning, the Royals brass might've decided now was the best time to bring him up to maximize ticket sales.

I was thinking the same re attendance. KC drew another 8K fans last weekend over the weekend before, and did it v. OAK on a weekend after division-rival MIN was in town. If Hosmer is a draw to a good baseball city that's primed for these guys and thirsty for anything at all to be excited about, and Moose is the same and has a similar but smaller marginal impact on attendance later in the summer, they could cover the Super 2 cost pretty easily. Not to mention, this is a team that's spent over $70MM on payroll the past two years, has only $11MM committed next year, and is difficult to project much higher than $50MM for 2012 even after a couple back-end pitchers, a catcher and a couple bench players are added in at market rate. (I still don't like the promotion, though, when it's just a matter of waiting another few weeks to eliminate the S2 issue.)

I think there's a lot of smart thinking here, but I don't agree with the concept of making up or offsetting the cost. It's not a one-to-one relationship. Let's make up a number of what the super-two year costs the Royals . . . say $7.5 million. Could they make that up in attendance? Sure. Then they'd have $7.5 million. But even if that happens, they COULD HAVE HAD $15 million had they waited just the one month. If I lend Jason Parks 40 grand tomorrow, and he skips off to Mexico forever with it (quite likely), I'm out 40 grand. If somehow I land a book deal next month for 40 grand, I've made up for it, but I'm still out 40 grand, ya know?

There's also the ticket sales factor of extra success. If I follow the premise that in 2014 all these stars will be up and running at the major league level, then if Hosmer is cost controlled you have $7.5 extra to spend.
Maybe that's money spent on a veteran who does enough to push the team to a division title. Or even gets them a World Series appearance.
Bottom line is the more money spent on the core players of the team during this period of predicted boom times is less money spent on supplementing that core. And without the supplements it will cost the team wins and potentially all the fans and merch sales that winning titles bring in.

The modest attendance bump is a) gonna be short term and b) would have happened anyway, had Hosmer been brought up in another month.
Attendance and t shirt sales are the old reliables for justifying bad moves, and they just are rarely the case.

The Reds acquisition of Jung Bong for Chris Reitsma may have been entirely based on t shirt sales and might have actually payed off (I recall reading an article at the time mentioning that "Bong" Reds jerseys were selling like hot cakes).

Peter7899

5/12

That correlates only if Jason was the reason you got the book deal. If the Royals don't bring up Hosmer, then theoretically they wouldn't be able to sell the additional $7.5 million in tickets.

To finish that thought, if the Royals start tanking in the next month (very likely), then maybe they only sell an additional $3 million in tickets for Hosmer's debut instead of the possible $7.5 million. Plus, they really only need to make maybe $5 million now, since the present value of the $7.5 million is less than that.

If he turns out to be Ryan Howard and wins an MVP award during his Super Two year, and takes the Royals to the cleaners for $10 million bucks then yeah we'll hear the I told you so's. I just think that's more the exception than the rule. Jay Bruce was a Super Two and made an additional $2.31M over the league minimum. Not a big deal. That's probably more what they're looking at instead of a Ryan Howard case.

jdouglass

5/12

What is the PR/Marketing value of an extra month of Hosmer, beyond tix, parking, beer, dogs, foam fingers, and HOSMER 35 jerseys sold in the ballpark shop? More buzz in the papers, a local Hosmer watch (I'll admit to flipping over from my team to the KC games on MLBtv when he's coming up all of this week), having your guy on the front page of ESPN.com for a couple days, etc. Repeat in a month with Moose, then a few weeks later with one of the pitchers, and you've got a pretty sustained buzz around a team that was only supposed to be interesting the last month or two.

bishopscreed

5/12

Here's a question for the smart folk in the BP community: does super-two status increase a player's salary only in the first, "extra," year of arbitration, or does it increase his salary during all years of arbitration? i.e., does a super-two player make more in his sixth year of service time than a comparable player who wasn't super-two? That would seem to affect the equation rather drastically.

The other factor is the chance that Super-Two status doesn't make it into the next CBA. If it doesn't, then all the teams that are keeping good prospects on the farm this year in hope of saving some money in 2013 will have wasted time and arguably hampered their rookies' development.
Betting on the next CBA is dangerous of course, but it was probably a factor in their decision.

I wanted to restate a point that I had made elsewhere about Hosmer and Boras.
Hosmer hiring Boras to represent him out of high school speaks to Hosmer's intent to be a "money first" player. However, it isn't factual to stay that Royals will not be able to lock up Hosmer because of Boras. If a long term deal that buys out his arbitration years and a few free agent years doesn't happen it will be because Hosmer doesn't want that type of deal. If however, Hosmer does want to entertain that possibility - and again, he likely doesn't because he hired Boras - then Boras will be no obstacle to Hosmer and the Royals having such a discussion.
Boras represents his clients' interests and there is nothing wrong with advising his clients to wait until free agency when waiting will be most financially rewarding. However, if he were to try and exert his will upon a player he would not have a client anymore.

There's no guarantee that Boras will not allow Hosmer to sign away his pre-arb years plus a free agency year or two if that is what Hosmer wishes. Carlos Gonzalez did it, and he's a Boras guy. All he had to do was tell Boras he wanted to do it and it was done. If Hosmer wants to, he can too.
I disagree thoroughly that all Boras clients are necessarily money-first guys. What I have heard from those players who are willing to talk about it is that the Boras Corp simply blew them away with its presentation, accessibility, facilities, etc., when making their pre-representation pitch. I have even heard one player state that "everybody else centers their entire presentation on why I shouldn't sign with Boras, instead of telling me what they were going to do for me."
A couple last thoughts: The Royals are looking at a ton of rookies coming up in the next two years. I don't think it's a bad idea for one (or more) of these guys to have a little bit of major league experience instead of all of them being thoroughly green at the same time. And don't forget, these guys will all likely hit their first arbitration year in the same year - something that has the potential to be financially more difficult for the Royals than paying Hosmer a year earlier than the others.

Really, what he said. Just because Boras gets the best deals for his player doesn't mean his players are money first, it just means they are smart. In addition, Boras works for his players, he certainly advises them, but ultimately, decisions on contracts and bonuses are their call.

Timber, KG, I'm fairly certain I didn't say, "...all Boras clients are necessarily money-first guys." In fact my point was that just because Hosmer is a Boras client didn't mean he couldn't be locked up. But, agree with what you both said.

You certainly implied it:
"Hosmer hiring Boras to represent him out of high school speaks to Hosmer's intent to be a "money first" player."
I think, from that comment, it's safe to assume that you view players who hire Boras as "money first."

Oleoay

5/13

You can be fairly certain that JD didn't necessarily say what he said, but you can safely assume what he implied.
:)

ostrowj1

5/12

It is not clear that Hosmer will make significantly more money as a super 2. Yes, he will make more in his first year of arbitration, but that might be it. Players aren't afraid to ask for big money in arbitration. If Hosmer enters his last arbitration hearing coming off of a season where he hits .300 with 40 HR, he will ask for 20+ mil regardless of what he was making the year before.

As much as we all respect KG, I think this article is a little disingenuous. Worrying about this now is crazy. We have no idea what things will look like in 3 years. And bringing all your guys up at the same time does not sound like a good idea. Hosmer needs to be the star now and let the other guys follow him up. Baseball people are always talking about too many rookies mess up the cake and while we here at BP blow that stuff off, it's a good rule of thumb.
Also, text messages from scouts aren't facts. Though funny and convincing, those are no more credible than any other speculation. Particularly speculation about a Boras client. There will be a strong inclination to keep this team together if it is successful. And the fan base has already signaled that they are ready to support it. Things will play out, but it is wrong to think Hosmer will bolt the second he can.

I also think the greater concern is keeping the arms cheaper than the hitters since they seem to have a greater potential to disappoint due to injury, etc. I like the move by the Royals despite some salary drawbacks that may or may not play out. We've seen some players will little service time get long-term deals that tend to get praised...perhaps the same happens here...even with the Boras factor.

Couldn't it be they want more to market to increase ticket sales? I know its short sighted but KC hasn't been known for their long-term outlook for many years. I say let them have their fun with an exciting new player. His HR swing last night against the Yankees reminded me of Texeira.

Isn't the question really just how many wins is the additional, what, 21 days or so of Hosmer worth, vs. an extra year of cost control? I think the Royals got excited - and wanted to reward a player for performance. Which is laudable. But it feels like a decision made in a vacuum.

As BBTN proved, the revenue increase from 75-80 wins is nowhere near what it is from 85-90 (to pick #s out of the air).
UNLESS this is one of those 1973 NL East-type seasons where one team goes 83-79, and the bottom-dweller is only 11 games worse.
The Royals see the Indians off to a hot start, see that the Tribe's pitching can't possibly do what they are doing for another 4 months, see that the Twins are snakebit, the Tigers enigmatic and the WhiteSox offense is asleep, and maybe, just maybe, the difference between Kila and Hosmer is the 1-2 wins it might take to steal the division?
If they make the playoffs, then 2012 Season Tickets sales will be even better than they would have been with the expected promotions of Duffy, Myers, et. al.

I think everyone is missing the point. These are the Royals not the Yankees or Cubs. What the Royals are doing is trying to open up a window of opportunity because if 2/3 of these prospects pan out then it is unlikely (impossible) to pay them all. When you bring them up all at once they all escalate in talent and pay at once. Hopefully, if you're lucky, you can have a 2-3 year window where they are all under cost control, all playing at the highest level, all at the same time ala the Rays before the inevitable rebuilding year comes.
But now that schedule is off because your best prospect, and your (probably) highest paid player is going to hit his huge payday a year earlier, which may shorten your window of opportunity. In return you have him producing in a year the Royals clearly have no chance to win a title.
The Royals weren't able to keep Carlos Beltran and there's no indication anything has changed in regards to holding onto players of that caliber now. The best plan would have been to keep Hosmer down as long as possible to maximize his productivity when the Royals can compete and before they lose him to his cost or free agency.

Actually, there ARE indications that the Royals have changed in regards to holding on to high caliber players. Billy Butler, Joakim Soria, and Zack Greinke are immediate examples. Not to mention a new willingness by David Glass to allow Dayton Moore to spend money, something he wasn't willing to do when Allard Baird was GM and Beltran, Damon, and Dye were traded. Heck, Glass ordered Baird to trade Beltran.
The uneducated think that the Greinke trade was simply more of the same, without understanding that it was something that had to happen for reasons that had nothing to do with money.

Yeah, keep 'em ALL down as long as possible. Collude on it, too. Bring back indentured servitude! Keep the N*****s down! Deny opportunity that is earned! Save a buck, make another. Interesting to see all these far-right arguments on here and QUITE ironic to see the most anti-union owner in baseball give Hosmer the opportunity to come up. The union needs to address this crap.
Who would have thought that SABR types would make an argument that would deny us the Junior Griffeys, ARods, CC Sabathia's of baseball? And we'll see fewer HoF careers.
Gee, Kevin, why don't you just call for bringing back Charlie Comiskey, Sam Breadon, and the Griffiths?
Anybody notice that the language is the same language of slavery, indentured servitude, and racism? Indeed, "keep 'em down." If that makes a scout or anyone else laugh....It makes me sick to my stomach. Move along to the Pat Robertson Club, Kevin.

I have to point out that Griffey, ARod and CC never produced titles with their original teams. Perhaps if they didn't cost as much during certain parts of their careers the team could have spent that extra money to produce a ring or two.
RE: SABR types. I don't think Kevin mentioned whether the NL exec was a SABR type, so I don't quite follow how he (the person that inspired this line of thinking) gets lumped in with that group.

Wow, what a ridiculous, uselessly over-the-top comment to interject into a fairly interesting debate.
Leaving aside your gratuitous lumping of the unmitigated evils of slavery/indentured servitude/racism with a system which is *collectively bargained* between the owners and the players - unlike the Reserve Clause era of Comiskey, Griffith, Breadon - how are we going to see fewer Hall of Fame careers? I'm pretty damn sure that the rate at which players are voted in by the BBWAA 20-25 years down the road won't be affected by the difference in a month's service time. Did Buster Posey's chances at Cooperstown take a hit last summer?
That aside, if the scouty types feel that Hosmer has little to prove at the Triple-A level, then it would seem to me that the Royals made the right call by bringing Hosmer up. If nothing else, it rewards the fan base and could very well boost attendance by keeping the team competitive longer into the season, which would seem to be a worthwhile goal whose benefits might easily outweigh the few million dollars it costs to move Hosmer's arbitration clock forward.

1)Clearly they're gambling that the super-2 thing will disappear in the next CBA. I don't think there's anyone alive except the prospective super-2s themselves, most of whom aren't in the MLBPA (being prospects in the minors still), who still wants it around.
2)I think in the big picture there is real, tangible value in staggering the arbitration/contract decisions. Say they do as your source said, and promote Hosmer+Moustakas+Montgomery+Duffy+Lamb all at once on June 1 of 2012. Come the 2015 offseason, if all those guys perform up to expectations (unlikely perhaps), the Royals could be looking at about a $50 million payroll increase in one offseason. No one (well, the Phillies I guess?) wants to deal with that.
Say further that the team's shown steady improvement those 3 years, winning 70, 75, then 83, putting them on the fringes of contention. The team looks promising but hasn't accomplished anything yet, and attendance has increased but they're far from selling out. Deciding who among them to keep/cut/trade would be both a nightmare and a shot in the dark -- what if they stop improving and the team is stuck in mediocrity? What if they become contenders but the fans don't show up?
By arranging things such that only 1-2 arbitration/contract decisions are made per year, each successive decision is made with more information about the shape the team is taking. If spending an extra $7.5 mil on Hosmer now helps avoid a $50 million mistake in a few years, it's absolutely worth it.
3)Like others have said, I wouldn't entirely discount the possibility of Hosmer (and perhaps Moose next year) getting Longoria'd. If the Royals offer Hosmer 8 yrs/$64 mil next week, even Boras couldn't in good conscience say that accepting it is not in the player's best interest.

I should say with regards to the arbitration clocks, that I see the promotion schedule playing out thusly:
-Hosmer up now
-Moose/one starter up in August, on 2012 Opening Day roster
-Other 2 starters up June 1, 2012
By doing that, they'll have brought these guys up more or less within one year of each other, but their arbitration clocks will be spread over 3 years if I'm calculating things right.

Ironhorse isn't as crazy as you think. I recall having similar thoughts about Hellickson when the Rays were thinking of letting him stay in the minors this year. He was ready at the beginning of last year and had already been in the minors too long. The Rays decisions will cost Hellickson millions of dolars and definitely hinder his chances of accumulating HOF stats. Ditto Posey and Stanton last year. If a guy's ready, he should be called up.

Was it in the Royals interest to call up Gordon and Butler in 2007? The big league team sucked up until recently, maybe KC should have kept them in AAA until they thought they could field a competitive team (meaning now). Surely, this has got to be profit maximizing behavior, right?

I guess the inevitable destructive nature of capitalism shines through and we shouldn't ignore the blood that's dripping off the hands of prospect repressing ownership groups accross the league.
Ironhorse is totally rational and KG is the new Grand Wizard...

HeavyHitter (and Ironhorse) are correct. While Ironhorse may have been over the top, his underlying point is legitimate.
The only quasi-justification for the teams in supressing players' development is that this is the natural outgrowth of the incentive structure around super-twos. Because all parties recognize this, I'd be stunned if this is still around in the next CBA. In my view, the Royals are taking a calculated risk that the super-twos will not exist in the next CBA, and that was the primary determinant in calling up Hosmer four weeks earlier. (As others have pointed out, it makes no sense otherwise, and I had a hard time digesting all the various justifications that didn't center on this.) I commend the Royals for taking the risk; gutsy call.

As a prospect and Royals fan, the fact that Dayton Moore seems committed to putting the best team on the field and not saving money years down the road is a huge incentive to get season tickets now or next year instead of waiting until 2013 or later.

I don't think anyone is arguing that all players should always be kept down in order to keep their service time in control.
The Royals are in a unique situation where they have virtually no shot to be competitive this season, but could be very good over the next 4-6 seasons if these prospects pan out. I think what Kevin and others are saying is that calling up Hosmer makes their master plan slightly more difficult to execute because Hosmer will be more expensive toward the end of that window.
I don't think anyone is suggesting that there aren't both costs and benefits to making this move. What's less clear is which will outweigh the other.
Incidentally, this is the first time I recall seeing a BP comment thread resemble some the inane ad hominem arguments usually found on articles posted on free sites.

KG's sober second thoughts notwithstanding I can't help but reflect that it's not as if in the past Dayton Moore has been particularly thrifty or efficient with his budget outlays. The man did, after all, dump 36 mil. on Jose Guillen and 55 mil. on Gil Meche.
So enjoy Hosmer in the bigs right now and, if the farm system is as good as advertised, look forward to more where he came from. If Boras advises Hosmer to use arbitration, and the kid gets to super two status and then free agency sooner than he might otherwise have done, so what? Money spent on this kid is money Dayton Moore can't piss away elsewhere. True, down the line not saving those millions may mean that they won't be able to keep them all and have to choose between Hosmer, Moustakis et al. They'll just have to cross that bridge when they come to it. A pleasant problem to look forward to.

Just posted on Rotowire ...
Scott Boras, the agent for Eric Hosmer, told Jeff Passan of Yahoo! Sports Thursday that he has no immediate plans to discuss a long-term extension with the Royals.
Odd timing for the comments, considering Hosmer has played in just five major league games to this point. He's an exciting hitter and should do well for himself down the road financially, but this story can go into hibernation for a good two or three years.
Source: Jeff Passan on Twitter May 12, 11:20 PM

The Royals have the talent in the high minors to add, say, five games to their win total this year:
Hosmer: 2 wins over Kila
Duffy: 2 wins over 5th starter
Montgomery: 1 win over 4th starter
They also have a ton of payroll flexibility for a rental this year, so let's say they can pick up another win at the ASB.
The Playoff Odds currently have the team at 1.2 percent. Even if that's the case (and I suspect it is a bit low because it overstates the odds for the Sox and Twins), surely six additional wins boosts the Royals playoff chance up to, say, 15 to 20 percent. That seems worth it to go for it.

To follow up, I just read this:
http://www.baseballprospectus.com/article.php?articleid=13875
Rany's system projects the Royals at 77 wins and the Indians winning the division with only 86 games...a nine game difference.

I give the Royals credit for promoting their player on merit rather than screwing him over, like the Giants did with Posey last year. I only wish the Giants had lost last year by one game after what they did.